U.K. Loses AAA Rating

Moody's Investors Service downgraded the U.K.'s AAA bond ratings by one notch, citing challenges to fiscal consolidation emanating from weak growth. The outlook on the ratings is now stable.

Moody's said the sluggish economic growth is likely to extend into the second half of the decade and in turn posing challenges to government's fiscal consolidation programme.

As a consequence of the UK's high and rising debt burden, a deterioration is expected in the shock-absorption capacity of the government's balance sheet, which is unlikely to reverse before 2016, it said.